David Is the General Manager of Awesome Limited and Is

question 29

Multiple Choice

David is the general manager of Awesome Limited and is considered to be the member of key management personnel. The following transactions occurred between David and Awesome Limited:
?David purchased a product of Awesome Limited on normal trading terms;
?David received remuneration from Awesome Limited amounting to £100 000;
?Awesome Limited issued 20 000 options to David, which can be converted into Awesome Limited's shares if target profit margin of 25% is achieved in the next three years.
Which of the above transactions must be disclosed as related party transactions?

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Definitions:

Customer Cost Analysis

The process of analyzing the costs involved in serving a customer, including acquisition, service, and support costs, to determine profitability.

Activity-Based Costing

An expense determination technique that identifies organizational activities and attributes the cost of each to all products and services, commensurate with their genuine consumption.

Direct Materials Cost

The cost of raw materials and components that are directly involved in the production of a product, easily traceable to the end product.

Direct Labor Cost

The wages and other expenses for labor directly involved in the manufacture of specific goods or services.